2024 just started, and tasks for the new year are already flooding in on us.
You might not be thinking about taxes yet, but the time has already come.
The IRS opened up their website this week for processing tax returns.
Whether you’re a type-A successful person who likes to do things ASAP, or someone who just wants to get taxes over with so you don’t have to think about them again, this is your chance to get your Form 1040 in early.
Let’s look at some ways you can ace this tax season and get the most out of your tax return.
When is Tax Season 2023?
Wait – 2023? Yes. While the calendar says 2024, your tax forms will say 2023. This is because the tax season is for filing taxes on money earned the year before.
It wouldn’t make sense to file taxes for 2024 yet – you haven’t earned all the money you’re going to earn this year yet!
Envato/sergign
Tax season 2024 started on January 23rd and ends on Monday, April 15, 2024.
Why would you file your tax return early?
Now that that’s out of the way, let’s talk about why you might want to file now, instead of waiting until April.
First, if you have a complex tax situation, it might be smart to start collecting your papers now instead of scrambling at the last minute. For example, if you bought or sold assets, earned money from a side hustle, or made student loan payments, you’ll need the numbers for that to file the most accurate tax return.
If you are expecting a large tax refund, filing early usually means that you’ll get your money back much sooner.
Don’t let the IRS keep your money any longer than necessary!
Is there a disadvantage to filing taxes early?
On the other hand, if you’re expecting to owe money, filing early can give you a few extra months to create a payment plan.
Paying taxes isn’t pleasant and it may be tempting to put it off as long as possible.
Envato/photovs
Handle with caution!
However, late tax payments can incur significant fines and penalties that will mean you owe even more money in the long run.
If you choose to take your taxes to a professional instead of doing a DIY job, it’s also much easier to get an appointment earlier in the season!
Is it OK to file your own taxes?
Most Americans can save money by DIY’ing their tax returns.
Electronic tax return software means that the puzzling rules and forms are done for you.
And if you made less than $79,000 in 2023, you can even file for free through the IRS website.
Check out this article as a quick guide of why you should file your own taxes.
Confirm your dates
The filing deadline for most taxpayers is Monday, April 15, 2024. There are limited exceptions, such as for taxpayers in the military in war zones.
Envato/sergign
If you know that you will be unable to file your taxes by April 15, you can file an extension.
This gives you an additional 6 months, until October 15, to file your return.
If you owe money, this does not give you extra time to pay, but it will mean that you don’t owe extra penalties.
Gather your paperwork
For most taxpayers, this will be your W-2 from your job. If you had any self employment income, either with a 1099 or receipts, you’ll need these also.
Finally, you’ll need documents that show proof for any eligible tax deductions.
If you’re filing online, you’ll also need some sort of identification, such as a driver’s license.
What happens if you file your tax return late?
The best way to avoid penalties is to file your taxes on time.
Envato/FabrikaPhoto
There are penalties for failing to file your taxes, even if you do not owe any money.
The other way to avoid penalties is to be sure your tax return is completely accurate.
For example, if you fail to report some of your income to the IRS, but the person who paid you that money reports it, the IRS will know that you under-reported your income and will recalculate your tax bill for you – with interest.
Final thoughts
Taxes don’t have to be intimidating. Tax preparation software has taken most of the complexity out of taxes for the average taxpayer.
Go forth and conquer your taxes, and get it done early!
